FLL

Business Context and Reporting Period

Company: Full House Resorts, Inc. (FLL)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and six months ended June 30, 2025
Business Overview: The Company owns, leases, operates, and develops casinos and hospitality facilities across the Midwest, South, and West regions, alongside contracted sports wagering operations. Key properties include American Place (IL), Silver Slipper (MS), Rising Star (IN), Bronco Billy's/Chamonix (CO), and Grand Lodge (NV).

Key Financial Metrics

Note: Long-term debt principal includes $450 million in Senior Secured Notes and $25 million in Revolving Credit Facility borrowings.

Material Changes vs. Prior Period

• Revenue Growth: Consolidated revenues increased 0.6% ($0.5M) for the quarter and 3.9% ($5.6M) for the six months compared to the prior year periods. This growth was driven by the ramp-up of American Place and Chamonix, offsetting the loss of Stockman's Casino.
• Profitability: Operating income turned negative for the quarter ($(74)K) compared to $2.3M in the prior year quarter, primarily due to increased operating expenses at new properties. Net loss widened to $(10.4)M for the quarter from $(8.6)M.
• Segment Performance:
  • Midwest & South: Revenues up 4.2% (QoQ) and 4.4% (YoY); Adjusted Segment EBITDA increased 3.9%.
  • West: Revenues declined 4.4% (QoQ) due to the sale of Stockman's, though six-month revenues rose 6.8%. Adjusted Segment EBITDA turned negative ($(1.1)M) due to early inefficiencies at Chamonix.
  • Contracted Sports Wagering: Revenues declined 42.5% (QoQ) and 23.4% (YoY) due to fewer active skins following operator changes.
• Asset Disposition: Completed the sale of Stockman's Casino on April 1, 2025. The transaction resulted in a net loss of $0.2M for the six months ended June 30, 2025, reflecting transaction costs.

Guidance, Outlook, and Risks

• Capital Projects: Construction of the permanent American Place facility is expected to commence in the second half of 2025. The Company anticipates needing additional financing for this project, potentially concurrent with refinancing existing debt maturing in February 2028.
• Liquidity: Management believes current cash balances ($32.1M), available credit facility capacity, and operating cash flows are sufficient for the next 12 months. Operating cash flow was negative $(1.6)M for the six months ended June 30, 2025, compared to positive $5.7M in the prior year, largely due to working capital timing.
• Regulatory Obligations: The Company has a long-term "Reconciliation Payment" obligation to the Illinois Gaming Board estimated at $50.7M, with the first payment of $8.5M due in 2026.
• Tax Legislation: The "One Big Beautiful Bill Act" (OBBBA) was signed into law on July 4, 2025. Management is evaluating the impact but does not expect a material effect on results of operations.
• Operational Risks: Seasonality affects West segment properties; weather conditions impact Grand Lodge; and competitive pressures exist in all markets. The Company is actively managing costs at Chamonix following a leadership change in March 2025.

Investor Verification Checklist

• Debt Maturity: Verify the timeline and strategy for refinancing the $450M Senior Secured Notes due February 2028.
• American Place Financing: Confirm the funding sources and capital requirements for the permanent American Place facility construction starting late 2025.
• Chamonix Ramp-up: Monitor the trajectory of Adjusted Segment EBITDA for the West segment to ensure operational inefficiencies are resolved.
• Sports Wagering Contracts: Assess the stability of the remaining sports wagering skins and the impact of the Indiana extension through 2031.
• Illinois Reconciliation Fee: Review the cash flow impact of the $8.5M annual payments to the Illinois Gaming Board beginning in 2026.